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Judgment
This is a typical case which demonstrates the extent of harassment to which citizens are put to by zealous and over-enthusiastic officers, not fully familiar with the provisions of law and yet entrusted with responsible functions. The Inspector of Vigilance Cell (Civil Supplies) Department, Mahaboobnagar, respondent No. 1 herein, has put the petition and his servants to grief and untold misery on account of his uncalled for actions. I may state the facts :
The petitioner manufactures ground-nut oil and sells the same in the State of Andhra Pradesh as well as outside. There is no prohibition on the free movements of ground-nut oil to outside the State of Andhra Pradesh. There is no control over its price. On 11-6-88 the petitioner dispatched 11 metric tonnes (11,000 Kgs.) of ground-nut oil through a tanker bearing No. CII.8368. The consignee, to whom the oil was being sent, was Mittal Traders, Chand Polu Bazar, Jaipur, Rajasthan State. The consignee is a Commission Agent who sells oil in the State of Rajasthan on behalf of the petitioner. The dispatch of 11 metric tons of oil by the petitioner on 11-6-88 was obviously in the course of the business regularly carried on in the sale of groundnut oil.
The tanker was proceeding from Kurnool to Jaipur via Hyderabad. The first respondent, an Inspector of Police, Vigilance Cell of Civil Supplies Department, Mahaboobnagar, intercepted the vehicle at 93/4 Km. stone on the National Highway No. 7 (Kurnool to Hyderabad). It was about 7.30 p.m. on 11-6-88. The vehicle was stopped and the first respondent elicited information from the driver of the vehicle concerning the groundnut oil being transported in the tanker. The first respondent called upon the driver to produce the documents with him. The driver produced the following documents :
a) Way-bill No. 332 dated 11-6-88 bearing the stamp of the Commercial Tax Officer, Kurnool, issued the petitioner supporting transport of 11 metric tons of ground-nut oil of the value of Rs. 2,35,000/-. The way-bill showed the consignee was Mittal Traders, Jaipur, Rajasthan State.
b) A letter addressed by the petitioner to the consignee at Jaipur directing the commission agent to sell the oil in the market profitably and after sales to send the sales invoice and statement of accounts along with ''F'' Forms.
c) Weighment chit issued by the petitioner supporting the weighment of the goods at weigh-bridge on 11-6-88, according to which the net weight of the goods was 11,000 KGs.
d) A letter addressed to the New India assurance Company Limited by the petitioner about the dispatch of the goods i.e. ground-nut oil, of the value of Rs. 2,35,000/- to be delivered as Mittal Traders, Jaipur. It was stated that the oil-tanker was owned by Rajkumar S. Katabia.
e) "Ghoshanaka Prapatru" which is in Hindi and issued in duplicate by the Rajasthan Government to the consignee, Mittal Traders, bearing Book No. 2119/2. The document evidence that the petitioner was dispatching 11 metric tons of ground-nut oil of the value of Rs. 2,35,000/- to Mittal Traders, Jaipur through an oil-tanker bearing No. CII 8368 of Shubh Laxmi Carriers, Hyderabad.
f) A receipt in duplicate bearing No. 394/11-6-88 issued by Subh Laxmi Bulk Carriers. Bahadurpura, Hyderabad, wherein it was noted that the consignor of the goods is the petitioner and the consignee is Mittal Traders, Jaipur. The receipt shows that 11 M.Ts. Of ground-nut oil is being transported in the tanker. Total freight charges payable was Rs. 8470/- against which the advance paid was Rs. 4,000/- and the balance to pay is Rs. 4470/-.
g) Xerox copy of A.P. Scheduled Commodities (Licensing and Distribution) Order 1982. According to which the licence number issued by the Dy. Supply Officer, Kurnool in favour of the petitioner is 1276 authorising the petitioner to carry on business in retail, wholesale and produce of edible oil and oil seeds. The licence permitted the petitioner to carry on business at premises bearing No. 1-12 Industrial Estate, Kurnool. The licence is valid till 31-3-91.
4) After perusing all the documents the first respondent questioned the driver to produce the invoice or sale-bill corresponding to the goods dispatched to the consignee at Jaipur. The driver replied that he had produced all the documents that were delivered to him by the petitioner and he has no other document with him.
The first respondent was obviously waiting on the National Highway with Panchas. He had drawn-up a panchanama duly attested by the Panchas. The first respondent seized the oil tanker and the 11 Metric tons of ground-nut oil contained in it. He had also seized all the documents produced by the driver and referred to above. He had arrested the driver. The ground-nut oil was later emptied from the tanker and 59 drums have been handed over to M. Manjoor Ahmed, son of Ameer Ahmed, Revenue Inspector (Civil Supplies) Stockiest point, Mahaboobnagar, for the purpose of keeping in safe custody until further orders, of the Collector, Civil Supplies, Mahaboobnagar. The empty oil tanker was handed over to the Station House Officer, I Town Police Station, for keeping in safe custody.
The reason for the seizure of the tanker, the ground-nut oil, the documents and the arrest of the driver is said to be due violations of the A.P. Scheduled Commodities (Licensing & Distribution) Order 1982 (for short, ''the Order'') allegedly committed by the petitioner. The alleged violations referred to in the panchanama are :
a) According to the licence issued, the petitioner should carry on business at premises bearing No. 1-12, Industrial Estate, Kurnool. By dispatching 11 metric tons of ground-nut oil in the above tanker, the petitioner must be held to have shifted his place of business from Kurnool to Jaipur, which is a contravention of condition 2(a) of the licence issued under Clause 3 of the Order.
b) The documents accompanying the tanker did not include invoice or sale-bill issued by the petitioner in respect of 11 metric tons of ground-nut oil being consigned in favour of Mittal Traders, Jaipur. The non-issue of receipt is a violation of condition 10 of the licence.
c) The petitioner had entered into a transaction which involved sale of ground-nut oil in a speculative manner, prejudicial to the maintenance and easy availability of supplies of ground-nut oil in the market which is a contravention of condition 7(i) of the licence.
Aggrieved by the aforesaid seizure of the ground-nut oil, the tanker and the arrest of the driver, the petitioner filed the present writ petition seeking a Writ of Mandamus declaring the seizure as illegal and without jurisdiction. The petitioner also seeks a further declaration that the respondents are liable to pay adequate compensation for the loss suffered by the petitioner due to illegal seizure. The petitioner sought an interim direction for the release of the oil tanker.
When the writ petition camp up for admission on 11-6-88, learned Government. Pleader Sri Subba Reddy, had taken notice and wanted time till 22-6-88 to file counter and obtain necessary instructions. The matter was, therefore, adjourned for final hearing without the issue of any interim orders and eventually it came up for final hearing on 30-6-88. Although no counter is filled by the Govt. Pleader had made submissions on the basis of record secured by him. I have also heard the learned Counsel for the petitioner, Shri Druba Mohanrao.
All that is necessary to examine whether the first respondent is right in coming to the conclusion, howsoever tentative it may be, that the petitioner violated conditions of licence issued to him under the Order. The first respondent claims that there is a violation of condition 2(a) of the licence on the ground that the petitioner has been shifting his place of business from Kurnool to Jaipur. Now, what is the basis for the allegation that the petitioner has been shifting his place of business from Kurnool, which is specified in the licence, to Jaipur in Rajasthan State ? Obviously the first respondent thinks that by transporting 11 metric tons of ground-nut oil to a commission agent in Rajasthan for sale the petitioner has been shifting his business premises. Undoubtedly, as indicated by the licence, the petitioner runs a factory in the Industrial Estate, Kurnool, where the ground-nut oil is manufactured for the purpose of sale. Could it be said that any honest man discharging his duties bona fide, come to the conclusion that the dispatch by a business man in the course of his business of 11 metric tons of ground-nut oil amounted to shifting of place of business from Kurnool to Jaipur which is the destination of the ground-nut oil ? The answer obviously is in the negative. The first respondent has no other material before him to come to the conclusion, even tentatively, that the petitioner was shifting his business premises violating condition 2(a). The place of business continues to be the one shown in the licence, i.e., Industrial Estate, Kurnool. Whenever goods are sold and dispatched to outside places, a business-man cannot be said to have shifted his business premises. If it could be so said, a business-man will be shifting his place of business every day to innumerable places, because he sells to various persons at different places and goods are dispatched to different destinations. The allegation contained in the panchanama that the petitioner has contravened condition 2(a) of the licence by shifting his business premises is wholly unsupportable. It should be said that the conclusion is not bona fide, and is set up for supporting an illegal seizure.
I may now examine the second allegation specified in the panchanama, namely, that there is a violation of condition 10 of the licence, inasmuch as the invoice or sale-bill in respect of 11 metric tons of ground-nut oil is not accompanying the tanker. Reference may be made to condition No. 10 of the licence. It may be extracted below :
"10. The licensee shall, except specially exempted by the State Government or by the licensing authority in this behalf, issue to every customer a correct receipt or invoice, as the case may be, giving his own name, address and licence number and (if any) of the customer, the date of transaction, the quantity sold, the price per quintal and the total amount charged and shall keep a duplicate of the same to be available for inspection on demand by the licensing authority or any officer authorised by him in this behalf".
Now the language of condition No. 10 does not indicate that an invoice or sale-bill should accompany the goods. According to normal trade practice, way-bill has to accompany the goods so that the authorities on inspection may note the person to whom the goods are consigned. Issue of an invoice or sale-bill is a separate act, altogether and there is no obligation on the part of a business-man to issue a sale-bill or invoice and send the same with the goods. On the contrary, the letter dated 11-6-88 issued by the petitioner to the Mittal Traders, Jaipur, the consignee, clearly indicated that the goods shall be sold by the consignee/agent in the Jaipur market and the consignee shall, after sales, send the invoice and the statement of accounts along with ''F'' forms to the petitioner. This letter clearly constitutes information to the effect that the petitioner has dispatched the goods to the consignee/agent at Jaipur for sale on consignment basis and for rendering an appropriate account and furnishing copies of sale-bills. Any person having elementary knowledge of business transactions would notice that the petitioner has not made any direct sale of goods to the consignee/agent at Jaipur. The goods were being sent to the agent at Jaipur for sale to various persons in Jaipur or elsewhere on behalf of the petitioner. Until the sales are effected by the consignee/agent the question of issuing a sale-bill or invoice does not arise. As far as the consignee/agent is concerned, all the appropriate documents are there to evidence dispatch of the goods to the agent for the purpose of sale, including, in particular, the letter dated 11-6-88. It is not known how the first respondent can insist on the production of a sale bill or an invoice when, in the every nature of business transaction, the goods are transported to a consignee/agent for sale in due course on behalf of the petitioner. Either the first respondent is totally ignorant of the nature of business transactions, or he has been acting totally mala fide in insisting that a sale-bill or invoice must accompany the goods and in the absence of sale-bill or invoice there is a violation of condition 10 of the licence. There is absolutely no ground to support the first respondents allegation. The less said the better.
I may now examine the final and third allegation, namely, that the petitioner has entered into a transaction involving sale of groundnut oil in a speculative manner prejudicial to the maintenance and easy availability of supply contravening condition 7(i) of the licence. Condition 7(i) of the licence is to the following effect.
"7(i) The licensee shall not enter into any transaction involving purchase, sale or storage for sale or any of the scheduled commodities in a speculative manner pre-judicial to the maintenance and easy availability of supplies of scheduled commodities in the market."
Now, on what basis did the first respondent come to the conclusion, howsoever tentative it may be, that the petitioner had entered into a transaction for sale of the commodities in a speculative manner. It is elementary that a speculative transaction does not involve delivery of goods. A speculative transaction is one which is settled otherwise than by the delivery. If the transaction is entered into for delivery of goods sold it ceases to be a speculative transaction. In the present case, the petitioner has been transporting 11 metric tons of ground-nut oil for the sale and delivery to persons at Jaipur by his commission agent. The very fact that a sale has to be effected by delivery of goods, renders a transaction non-speculative. There is not the slightest material or justification before the first respondent to make an allegation that the petitioner has entered into a transaction in a speculative manner prejudicial to the maintenance and easy availability of supplies of scheduled commodities in the market. It may be added that there is no dearth for ground-nut oil in the market in the State of Andhra Pradesh and large stocks of oil are maintained and easily available. The first respondent should not have entertained any belief that the dispatch of 11 metric tons of ground-nut oil is firstly a speculative transaction and secondly it is prejudicial to the maintenance and easy availability of supplies of scheduled commodities in the market. There is no material to support the allegation.
In the panchanama there is also a reference by the first respondent that the petitioner was transporting ground-nut oil "clandestinely from Kurnool to Jaipur to get illegal profits". Now, what is the basis before the first respondent to say that the transaction under consideration is a clandestine transaction and what does the first respondent mean by stating that the transaction is entered into by the petitioner to get illegal profits. The mass of documents produced by the driver before the first respondent would show the total genuineness of the transaction. It is supported by way-bill, a letter addressed by the petitioner to the consignee at Jaipur, weighment chit, a letter addressed to the Insurance Company document issued by the Rajasthan Government concerning the despatch of 11 metric tons of ground-nut oil by the petitioner to the consignee, receipt issued by the bulk carriers and finally the licence issued to the petitioner by the Dt. Supply Officer, Kurnool, authorising the petitioner to carry on business in the manufacture and sale of ground-nut oil. A perusal of the documents would leave no doubt that the entire transaction is a genuine one and there is no circumstance warranting investigation into the matter. The seizure of the carrier, and the ground-nut oil together with documents above referred is wholly uncalled for. It is unfortunate that the driver of the vehicle should have been arrested and detained. I would not have in the normal course endeavoured to demonstrate the extent of harassment caused by the first respondent to the petitioner had it not been for the fact that of late a number of cases are coming up before this Court where goods are seized on hopelessly untenable grounds. The actions of the Vigilance authorities may not be open to question if they act on bona fide, but then the details set out earlier could leave no one in doubt that the action of the first respondent in the present case is not bona fide and is not in the normal discharge of his official functions. It must be said that the action taken by the first respondent is directed to cause uncalled for harassment to the petitioner. From 11-6-88 onwards the tanker is lying without being looked after. The oil is entrusted to an outsider, with what result nobody can guess and the driver of the vehicle was detained. There can be no exaggeration in the petitioner''s claim that on account of the action of the first respondent he had suffered serious damage.
Having regard to the facts and circumstances there shall be a direction to the respondents to release forthwith, I repeat forthwith, the oil-tanker and also the ground-nut oil contained in the oil-tanker and since entrusted to Manjoor Ahmed, Revenue Inspector (Civil Supplies) Stockiest point, Mahaboobnagar. If the driver of the tanker continues to be under detention he shall be released forthwith. It is open to the petitioner to take such action, as he may think fit, against the first respondent claiming appreciate damages. It is also open to the driver of the vehicle to take appropriate action against the first respondent for illegally detaining him in custody. In the event of any action being taken the first respondent claiming damages by the petitioner or in the event of the driver of the vehicle initiating any action against the first respondent for illegal detention, the matter shall be examined by the Courts independently and nothing said in this judgment shall constitute basis for action against the first respondent.
It is not clear if any S. 6-A proceedings are initiated before the Collector, Civil Supplies, Mahaboobnagar. In case any such proceedings are initiated, they stand quashed in view of my finding that the seizure is illegal.
A copy of this order shall be marked to the Inspector-General, Vigilance Cell (Civil Supplies) for his attention and issuing appropriate instructions to the Inspectors on vigilance duty.
The writ petition is accordingly disposed of. The first respondent shall pay personally costs of Rs. 2,000/- to the petitioner. Government Pleader''s fee Rs. 250/-.
Order accordingly.